Home Legal News [PSUs ] Supreme Court asks Centre to reconsider demanding dues from PSUs

[PSUs ] Supreme Court asks Centre to reconsider demanding dues from PSUs

by Muskan
Supreme Court (SC)
The Supreme Court on Thursday asked Centre through the Department of Telecommunications (DoT) to reconsider demanding Adjusted Gross Revenue (AGR) dues from Public Sector Undertakings (PSUs).

In the meantime, the telecom companies have been ordered to file affidavits to show as to how they propose to complete the payment of their liabilities towards AGR dues.

The Bench comprising of Justices Arun Mishra, S Abdul Nazeer, and MR Shah took up the case for hearing today via video conferencing.

justice arun mishra
Arun mishra
psu mr shah
MR shah

On the last date of hearing, the Court had pulled up the DoT for allowing telecom companies to self-assess the dues.

The Apex Court considered two aspects of the matter in today’s hearing, first, relating to the demand made from the PSUs, and second, on the proposed staggered payment of dues over a period of 20 years.

The Court has sought to know the mode of payment proposed by the telecom companies along with the guarantees and sureties proposed to be furnished against payment of AGR dues.

Pointing out to the Court that the centre had examined the possible impact of recovering all dues from the telecom companies in one go, Solicitor General for India Tushar Mehtasubmitted,

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“Government has examined the telecom dues case… If all telecom dues are paid at one go then it might disrupt telecom services if some operator shuts operations.”

The Court asked Mehta about the timeframe being proposed by the government for recovering these dues.

The basis for pitching a period of 20 years as a reasonable window was also questioned by the Court. Mehta, however, explained that such proposition was only made after considering a number of factors. Mehta pressed further that the payment of Rs. 1.43 lakh crore could be made over this period of 20 years.

Senior Counsel Kapil Sibal and Mukul Rohatgi, on behalf on Hughes Communication and Vodafone-Idea respectively have inturnsought time to reply on the issue. Senior Counsel Abhishek Manu Singhvi,arguing for Bharti Airtel, told the Court that Airtel was liable for 70 per cent of the dues out of which only a minimal amount was remaining to be paid. Senior Counsel Arvind Datar also sought time to file an affidavit on behalf of Tata Group.

Rohatgi presented before the Court the tight financial condition Vodafone-Idea is currently in owing to which furnishing of a bank guarantee would not be possible. Senior Advocate Shyam Divan,appearing for a group of telecom companies including Aircelalso pointed out to the Court that a resolution process under the Insolvency and Bankruptcy Code (IBC) was going on.

The Court went observed that PSUs were being roped in under the ambit of the October 2019 judgment. Justice Mishra said that this judgment was silent on PSUs, and hence observed that dues demanded against PSUs must be withdrawn.

“Every day I think about how our judgement has been used and misused.”

The Court questioned the concerned authorities as to how its judgment was “misused” against the PSUs, noting that an amount of Rs 4 lakh crore was demanded from the PSUs on account of AGR dues. Meanwhile it observed that this demand must be withdrawn as it is not in public interest.

Replying to this, Mehta said that PSUs were licence holders and demands were being made against them, so the DoT was under the impression that it was required to raise demands against PSUs as well. The SG offered to file an affidavit in this regard to explain the DoT’s position.

In the previous hearing, the Court had expressed its displeasure with the telecom companies stating that the continued attempts made by these companies seeking re-assessment of the October 2019 order amounted to fraud on the Court. The Court also described the request to allow self-assessment or re-assessment of AGR dues by telcos as “sheer contempt.”

Alluding that the telecos were attempting to influence the court’s decision on the issue of AGR through the media, the Court in unequivocal terms clarified that there will be no objections to the assessment permitted.

The DoT had earlier moved a plea for modification of the Court’s order seeking to allow telecoms to make the payment over twenty years.

The DoT stated that this formula had been arrived at keeping in view “vital issues relating to financial health and viability of the telecom sector and need for maintaining competition and level playing field in the interest of consumers.”

In its application, the DoT had highlighted that the telecom companies have begun to make part payments. It pointed out that these service providers cater to crores of consumers in the country and an immediate adverse impact on the functioning of these telcos will not only affect the consumers, but will also have a massive effect on the overall economy of the country.

In its October 2019 judgment, the Supreme Court had granted the telecom companies a period of 90 days to pay the dues in view of the new meaning attributed to Adjusted Gross Revenue.

This period of ninety days wasto lapse on January 24. After the companies approached the Supreme Court seeking a modification of its order, the deadline was extended till March 17 in an order passed on February 14.

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